Ask the Car Salesman: Anything You Want to Know

So this other thread gave me idea. The MT staff does these "Ask the..." threads, so I figured I'd do one.

So I, the resident car salesmen, am offering a service. I will answer any and all questions to the best of my ability. This is not to incite a flame war or insult exchanging. So if all you've got to offer is "Ugh, I hate car salesmen, *** ing slime balls...", spare me. I've heard it all, and said the same thing about you.

If you actually want some honest, non-bias answers about things, however, shoot away.

skpensfan:I assume you make a commission. How does that work? Straight up percentage of dollars sold?

Well, it's a pretty simple concept, but the specifics will vary from one dealership to the next.

You essentially have 2 primary pay models-

1) Salary and Commission

2) Draw and Commission

Option 1 is pretty self-explanatory. You get paid a weekly salary, and you get paid a commission on every vehicle you sell. The nice thing about this model is you are guaranteed pay even if you don't sell anything. It's also money in your pocket every time you sell a vehicle. The drawback is your commission rate will be be less.

Option 2 is when you get paid a certain amount every week, but you have to pay it back out of your commission check. So if you get $400 a week, that equals a $1,600 draw. That $1,600 will get taken out of you commission check when you receive it. The nice thing about this is that you usually get paid more a week, which helps with expenses. You will also get a higher percentage of commission than someone who is on salary. The bad thing is sometimes salesmen won't even break their draw. So you didn't get paid for the vehicles you sold, technically.

The commission you receive is a percentage of the gross the deal made.

Example-

You sell a car for $20,000.

That car cost the dealer $18,000.

That means a $2,000 profit was made.

You will get paid a certain % of that $2,000

Most people on salary get paid 20%. So that person made $400.

Most people on draw will get 30%. So that person made $600.

The catch is what from what point or cost dealers consider gross from. Some dealers pay commission on anything over invoice. Some factor in a 'pack', which ensures the dealer makes money, even if the salesman doesn't. These are small details that vary from dealer to dealer, bu make can make a big difference in a salesperson's pay.

If a deal doesn't make any money, or if it loses money, you get paid a 'mini'. That's the absolute minimum money you can make selling a car. It's usually between $100 and $200. So if the dealer sells a car at cost, or close to it, you get paid a mini. That's it. Most new car deals are a mini.

Some dealer will also pay a flat rate per car sold, like $300. This is a double-edged sword. It pays better than a typical 'mini', but if you make a good gross, you don't get paid on it. This is kind of rare, though.

I personally like, and work, a salary + commission system. It pays a lower %, but it's money in my pocket every time I sell a car, and I like that.

I think, objectively, a good brand to sell is one that appeals to youthful buyers such as Kia or Hyundai. This increases the chances of them coming back in the future to buy from you again.

While there is something to be said for a brand like Toyota, which has a very high retention rate, so many of the buyers are old and only have a few purchases, if any, left. They have little to no appeal to new buyers, and they can't keep counting on repeat buyers. Eventually, they're going to die.

Subjectively, and this is probably the better answer, it's whatever brand you personally like. It's much easier to sell a brand you actually like and would readily own/drive. Also, whichever dealer will treat you and customers the best, and pay the best.

skpensfan:I assume you make a commission. How does that work? Straight up percentage of dollars sold?

At the dealership where I worked it was commission or minimum wage depending which ever one was higher, as far as the commission goes it was 25% of the profit or a $200 minimum and then the month was basically split into two half the first half you had to sell five cars and get a $500 bonus and for everyone after that it was an additional $125 so a sixth car would pay you at lest $325. And for the second half of the month is is the sixth car that gets you the bonus and after that it is the $125 more per car.
___________________The C63 kicks you in the gut with torque and power-slides. Either you will love it or get the hell out of its way.---------------------------2015 VW VW GTI Autobahn2012 VW Passat 3.62011 VW GTI2005 Mercedes C3202006 VW Passat 2.0T2004 VW Golf GL

I would say autotrader.com and do a search around where you live and tell them that you can buy this bat mobile at this place for $2k less and see if they can match it, if they can, they most likely will and if they can't they will probably give you the best deal they can.
___________________The C63 kicks you in the gut with torque and power-slides. Either you will love it or get the hell out of its way.---------------------------2015 VW VW GTI Autobahn2012 VW Passat 3.62011 VW GTI2005 Mercedes C3202006 VW Passat 2.0T2004 VW Golf GL

and for a new car I would say truecar.com tends to be pretty accurate.
___________________The C63 kicks you in the gut with torque and power-slides. Either you will love it or get the hell out of its way.---------------------------2015 VW VW GTI Autobahn2012 VW Passat 3.62011 VW GTI2005 Mercedes C3202006 VW Passat 2.0T2004 VW Golf GL

If it's a trade, there's absolutely no way tell what the dealer has in it. Auction prices fluctuate, and that could actually backfire if you use a price that is higher than transaction costs at the time the dealer bought the car.

The best way really is just to do some research into what the cars are selling for in you region. Take a high price, a low price, and then an average one. Then make an offer on the vehicle you are looking at accordingly. If it's in great shape, understand you're going to have to pay more for it. If it's on the rough side, you shouldn't have to pay on the high side.

If you're getting a pretty good discount (anything $1,500 or over), and they're giving a fair trade in, it's probably a good deal. The only exception to this would be a rare instance when a dealer got into a vehicle for really cheap and has a lot of markup. In the internet age, this is very rare. Most used cars don't have the markup consumers expect.